KRS 304.15-310: Nonforfeiture provisions.

(1) No policy of life insurance, except as stated in KRS 304.15 -360 shall be delivered

or issued for delivery in this state unless it shall contain, in substance the following

provisions, or corresponding provisions which in the opinion of the commissioner

are at least as favorable to the defaulting or surrendering policyholder as are the

minimum requirements hereinafter specified and are essentially in compliance with

KRS 304.15-352:

(a) Paid-up nonforfeiture benefit. That, in the event of default in any premi um

payment, the insurer will grant, upon proper request not later than sixty (60)

days after the due date of the premium in default, a paid -up nonforfeiture

benefit on a plan stipulated in the policy, effective as of such due date, of such

amount as may be hereinafter specified. In lieu of such stipulated paid -up

nonforfeiture benefit, the insurer may substitute, upon proper request not later

than sixty (60) days after the due date of the premium in default, an actuarially

equivalent alternative paid -up nonforfeiture benefit which provides a greater

amount or longer period of death benefits or, if applicable, a greater amount or

earlier payment of endowment benefits;

(b) Cash surrender value. That, upon surrender of the policy within sixty (60)

days after th e due date of any premium payment in default after premiums

have been paid for at least three (3) full years in the case of ordinary insurance

or five (5) full years in the case of industrial insurance, the insurer will pay, in

lieu of any paid -up nonforfe iture benefit, a cash surrender value of such

amount as may be hereinafter specified;

(c) Effective date of benefit. That a specified paid -up nonforfeiture benefit shall

become effective as specified in the policy unless the person entitled to make

such election elects another available option not later than sixty (60) days after

the due date of the premium in default;

(d) Cash surrender value if policy paid up. That, if the policy shall have become

paid up by completion of all premium payments or if it is continued under any

paid-up nonforfeiture benefit which became effective on or after the third

policy anniversary in the case of ordinary insurance or the fifth policy

anniversary in the case of industrial insurance, the insurer will pay, upon

surrender of the policy within thirty (30) days after any policy anniversary, a

cash surrender value of such amount as may be hereinafter specified;

(e) Mortality table and interest rate used. In the case of policies which cause, on a

basis guaranteed in the policy, u nscheduled changes in benefits or premiums,

or which provide an option for changes in benefits or premiums other than a

change to a new policy, a statement of the mortality table, interest rate, and

method used in calculating cash surrender values and the paid-up

nonforfeiture benefits available under the policy. In the case of all other

policies, statement of the mortality table and interest rate used in calculating

the cash surrender values and the paid -up nonforfeiture benefits available

under the policy , together with a table showing the cash surrender value, if

any, and paid -up nonforfeiture benefits, if any, available under the policy on

each policy anniversary either during the first twenty (20) policy years or

during the term of the policy, whichever is shorter, such values and benefits to

be calculated upon the assumption that there are no dividends or paid -up

additions credited to the policy and that there is no indebtedness to the insurer

on the policy; and

(f) Method used in computing value and be nefit. A statement that the cash

surrender values and the paid -up nonforfeiture benefits available under the

policy are not less than the minimum values and benefits required by or

pursuant to the insurance law of the state in which the policy is delivered ; an

explanation of the manner in which the cash surrender values and the paid -up

nonforfeiture benefits are altered by the existence of any paid -up additions

credited to the policy or any indebtedness to the insurer on the policy; if a

detailed statement of the method of computation of the values and benefits

shown in the policy is not stated therein, a statement that such method of

computation has been filed with the insurance supervisory official of the state

in which the policy is delivered; and a state ment of the method to be used in

calculating the cash surrender value and paid -up nonforfeiture benefit

available under the policy on any policy anniversary beyond the last

anniversary for which such values and benefits are consecutively shown in the

policy.

(2) Any of the foregoing provisions or portions thereof not applicable by reason of the

plan of insurance may, to the extent inapplicable, be omitted from the policy.

(3) The insurer shall reserve the right to defer the payment of any cash surrender val ue

for a period of six (6) months after demand therefor with surrender of the policy.